investment return on safety training

There’s good news for businesses looking for a return on safety training investment.

Recent international research shows an increase of 10% in safety training activities, leads to a reduction of up to 15% in safety incidents when there are dedicated safety training programs in place.  It’s more pronounced in smaller firms that traditionally have a higher level of safety incidents than larger companies.  Smaller firms often lack dedicated safety resources, however investing in training can help to mitigate workplace injuries and fatalities.

Low safety incident numbers are good for business. First, it helps to meet the duty of care requirements to provide a safer workplace. Second, empirical research shows that a company’s safety-related practice is a key driver of customer satisfaction and sales, which increase by over 10% when safety incidents are low. Third, reduced incidents lead to lower rehabilitation costs and direct hits to the business bottom line.

For this article, we investigate research that looks at three studies to summarise the positive link between safety training and a reduction in safety incidents. Study 1 reviewed the safety reports of an oilfield services company across 1,199 North American locations between 2008 and 2018. The second study examined 8,824 publicly listed companies and study 3 examined 4,236 workplaces in South Korea. 

Study One – Smaller Firms

Study 1 examined whether, and to what extent, safety-training completion mitigates financial loss using the safety reports from a leading global oilfield services company. The authors augmented the safety reports with the company’s loss reports. Employees at each location completed minimum training courses on typical topics. For example, fatigue management, hazard identification, first aid, behaviour change, emergency response, and fire safety.

For smaller firms, the results show that on average, a 10% increase in safety training completion can save a company between 11-13% per year in internal financial losses incurred by incidents and accidents. Similarly, a 10% increase in safety training decreases customer-financial loss of them no longer buying a company’s product or engaging in their services by 6-8%. This is a significant return on safety training investment.

Read our article, Preventing Workplace Injuries and Controlling Risk.

Study 2 – Large Public Companies

The previous study investigated the investment return on safety training and found a significant benefit for smaller firms. Study 2 investigated over 13,000 large public firm executive perspectives on their company’s safety training strategy and communications with their stakeholders, including investors, analysts and customers.

The study looked at how the company’s safety training is communicated externally. They determined the effect of dedicated safety training programs on sales of their products and services.

Interestingly, the results show that the investment return on safety training ranged between 4% and 15% per annum, with smaller firms once again achieving higher levels.

Read our article, Improve EHS: Safety Myths, Culture & Training.

Study 3 – Safety Training Investment Financial Outcomes

Study 3 interrogates a national survey of around 5,000 South Korean companies across different industries in 2018 about their workplace’s health and safety conditions.

The study looked at their safety investments, financial outcomes (sales), and firm demographics to determine the investment return on safety training.

Study 3 shows that safety investments enhance firms’ sales with similar increases to the first two studies. Further, safety investments of workplaces in Study 3 capture a variety of initiatives targeted at mitigating safety incidents (e.g., training and human resources management).

Read our article, How is Health and Safety a Strategic Investment?

Study Conclusions

This research quantifies the extent to which safety training programs mitigate financial losses due to safety incidents and enhance sales across three studies.

The results show that:

(1) a 10% increase in safety training completion decreases the financial loss by 6% to 13% (Study 1),

(2) the sales of firms with high safety training track records and communications are 4% to 15% higher  (Study 2),

(3) safety investments increase sales (Study 3), and

(4) these effects are stronger among smaller firms.

The investment return on safety training is therefore a positive activity and good for your business.

Read our article, Why is ESG so Important for Your Business?

What Does This Mean for Your Organisation?

Organisations that invest in safety training programs not only achieve lower incident rates but also increase the positive sentiment of investors and customers for their products and services.

The Tap into Safety Platform offers interactive and engaging training online and on smart devices. We focus on critical risks and the common workplace hazards that can lead to a fatality or serious injury within industry-specific scenarios. Courses can be completed between 5-30 minutes and include an assessment certificate of completion and in-depth reporting.

The Platform has over 200 out-of-the-box courses across a range of industry settings that can easily integrate into your systems. If we don’t have what you need, we also build custom training content, including induction and onboarding.

If you’re looking for an investment return on safety training and you’d like to know more, please contact us or click through to try a free online demo.

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